Form 4: Cloudflare CFO Sells 10,000 Shares Under 10b5-1 Plan

Cloudflare's Chief Financial Officer, Thomas J. Seifert, sold 10,000 shares of Class A Common Stock for approximately $2.0 million, following the exercise of options and conversion of Class B shares, all under a pre-arranged trading plan.

Summary

• Cloudflare CFO Thomas J. Seifert exercised 10,000 employee stock options at a price of $2.04 per share on December 22, 2025.
• Concurrently, 10,000 shares of Class B Common Stock were converted into Class A Common Stock on December 22, 2025.
• Seifert then sold a total of 10,000 shares of Class A Common Stock on December 22, 2025.
• The sales were executed at weighted average prices ranging from $198.6362 to $203.3469 per share.
• These transactions were conducted pursuant to a Rule 10b5-1 trading plan adopted on November 26, 2024.
• Following these transactions, Seifert directly beneficially owns 137,486 shares of Class A Common Stock and 8,925 shares of Class B Common Stock.
• Seifert also indirectly holds 288,300 shares of Class B Common Stock through a partnership and three trusts.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to significant insider selling by a key executive, even though it was pre-planned. While 10b5-1 plans mitigate the immediate negative signal, the sheer volume of shares sold (10,000 shares for ~$2 million) still represents a reduction in direct insider ownership.

Positives

• The exercise of employee stock options indicates the reporting person is realizing value from their compensation.
• The transactions were conducted under a pre-arranged Rule 10b5-1 trading plan, indicating planned diversification rather than a reaction to new negative information.

Negatives

• The Chief Financial Officer sold a significant number of shares (10,000 Class A Common Stock) for approximately $2.0 million.
• Insider selling, even under a 10b5-1 plan, can sometimes be perceived negatively by the market as it reduces the insider's direct equity stake.

Future Outlook

NA

Industry Context

NA

Related Party Transactions

• The reporting person indirectly holds 150,000 shares of Class B Common Stock through Center Court Partners Ltd., for which the reporting person serves as a partner.
• The reporting person indirectly holds 138,300 shares of Class B Common Stock across three separate trusts (Center Court 2020 Trust 1, 2, and 3), for which the reporting person serves as trustee.

Stakeholder Impact

• Shareholders: May view the CFO's share sales as a signal, potentially influencing their perception of the stock's future value, though the 10b5-1 plan mitigates immediate concerns.
• Employees: No direct impact mentioned, but general market sentiment could indirectly affect employee morale or stock-based compensation perceptions.

Key Dates

Recommendation

While the CFO sold a significant number of shares, the transaction was pre-planned under a Rule 10b5-1 plan, which suggests a systematic approach to diversification rather than a reaction to new, negative material information. The company's underlying fundamentals are not addressed in this filing. Therefore, a "hold" recommendation is appropriate, advising investors to maintain their current position while monitoring future company performance and broader market conditions, as this insider sale alone does not provide sufficient grounds for a "buy" or "sell" decision.

Keywords

Cloudflare, NET, Form 4, Insider Trading, Stock Sale, CFO, Thomas J. Seifert, 10b5-1 Plan, Equity Compensation, Stock Options